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20. Which one of the following stocks is correctly priced if the risk-free rate of return is 3.7 percent and the market risk premium is
20. Which one of the following stocks is correctly priced if the risk-free rate of return is 3.7 percent and the market risk premium is 8.8 percent? Stock Beta Expected Return A 0.64 0.97 12.03% 9.47% 1.22 14.44% D 137 15.80% 1.68 18.37% a. A b. B , d. D e, 19. You have a portfolio consisting solely of stock A and stock B. The portfolio has an expected retum of 10 percent. Stock A has an expected return of 12 percent while stock B is expect return 7 percent. What is the portfolio weight of stock A? a. 45 percent b. 50 percent c. 55 percent d. 60 percent e. 70 percent
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